Tencent is a Chinese Internet company that has invested $400 million in online U.S. gaming company Riot Games. Tencent will be getting a majority ownership in the company as a result.

Riot Games is a social game development company that is best known for creating the League of Legends.  Earlier this week Riot Games announced that they have raised about $8 million in Series B.  The investors include Benchmark Capital, FirstMark Capital, and Tencent Holdings.  Rather than making revenue from advertising, Tencent and Riot games depend on the sales of virtual goods.

Riot Games is currently developing an online game platform which is what the funding will go towards.  Considering that Tencent is one of the largest virtual good dealers in China, they may even lend their expertise to Riot Games.  The company is licensing the League of Legends in China and will launch in the country by 2010.

Tencent is the parent company of Internet portal QQ.com.  They sell virtual goods through their portal, IM software, social networks, and games.  These virtual goods include pets, clothing, wallpapers, etc.  Tencent made about $700 million last year according to BusinessInsider.